Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

Autoliv's Earnings Beat Estimates

Autoliv Inc. (ALV - Free Report) reported second quarter 2013 earnings of $1.44 per share, beating the Zacks Consensus Estimate by 5 cents. Earnings improved 8.3% from $1.33 per share reported in the second quarter of 2012 on the back of lower effective tax rate and favorable interest expense.

Consolidated revenues rose 5.2% to $2.19 billion, beating the Zacks Consensus Estimate of $2.17 billion. The year-over-year improvement in revenues was driven by increasing focus on safety by leading Chinese car manufacturers.

Revenues from Europe benefited from increase in vehicle production and higher sales to premium European carmakers. This was partially offset by a divestiture in 2012 and adverse currency effects. Excluding divestitures and effects of currency exchange, organic sales went up 6% as against expectations of a 3% increase.

Operating income grew 1.9% to $194.0 million or 8.8% of sales from $190.4 million or 9.1% in the year-ago quarter. Excluding capacity alignment and antitrust investigations costs, operating margin was 9.1%, which was higher than the company’s guidance of 8.5%.

Sales of Active safety products (automotive radar, night vision systems and vision camera with driver assist systems) surged 71.4% to $84.5 million. The increase was driven mainly by the new radar business with Daimler’s (DDAIF - Free Report) Mercedes, which is rolling out collision prevention assist across most of its platforms. The growing radar business for General Motor Company’s (GM - Free Report) Chevrolet, Cadillac, GMC and Buick brands also boosted sales.

Financial Position

Autoliv had cash and cash equivalents of $1.0 billion as of Jun 30, 2013, up from $917.3 million as of Jun 30, 2012. Total debt decreased to $624.0 million from $644.2 million as of Jun 30, 2012.

In the first half of 2013, the company’s cash flow from operations improved to $332.6 million from $316.6 million a year ago. Capital expenditures (net) increased to $174.2 million from $163.6 million in the year-ago period.

Guidance

Autoliv expects consolidated and organic sales growth of 6% and projects operating margin to be 8.5% in the third quarter, excluding capacity alignments and antitrust investigations costs.

For full year 2013, the company anticipates organic sales growth of 4% and operating margin of around 9%, excluding capacity alignments and antitrust investigations costs.

Our Take

Autoliv has a stable market share in both airbag modules and seat belts in North America, Europe and Asia. The company has continuously expanded in low-cost countries, including Romania and China, in order to meet local demand and to consolidate manufacturing from high-cost countries. However, we are concerned about significant customer concentration risks as the company’s top-five represents about 60% of sales.

Currently, the company retains a Zacks Rank #3 (Hold). In the same industry, Visteon Corp. (VC - Free Report) , which carries a Zacks Rank # 1 (Strong Buy), is worth a look at the moment.

Resources

Client Support

Follow Us

Zacks Research is Reported On:

Yahoo

MSN

Marketwatch

Nasdaq

Forbes

Investors.com

Morningstar

Zacks Investment Research is an A+ Rated BBB Accredited Business.

Copyright 2016 Zacks Investment Research

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1988-2015 and were examined and attested by Baker Tilly Virchow Krause, LLP, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.